A Stock Is Currently Selling for $43 a Share

question 441

Multiple Choice

A stock is currently selling for $43 a share. The risk-free rate is 6 percent and the standard deviation is 30 percent. What is the value of d₁ of a 6-month call option with a strike price of $45?

• A) .0298
• B) .0317
• C) .0332
• D) .0432
• E) .0449

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Definitions:

Random Assignment

The process of selecting participants for experimental and control groups by using a chance procedure to guarantee that each participant has an equal probability of being assigned to any of the groups; a control for selection bias.

Participant

An individual who takes part in a study or experiment, providing data for researchers to analyze.

Equal Chance

The principle that each participant or subject in a study has an equal probability of being chosen for any given condition or treatment.

Confounding Variable

is an external factor in a research study that may affect the outcome of the experiment, leading to inaccurate conclusions if not controlled.